Urgent question about direct debits,please read

[Linnet]

I bought a new car in the middle of August. The payment for the old car went out of the bank by direct debit on the 7th of the month so I had paid the August payment for the old car before I picked up the new car.

I've just checked my bank account tonight and the old finance company have taken out their payment on the 7th of this month, for the car I no longer have. I have a letter from them about the final payments for the old car being paid off by the end of August, the Car dealership told me all this would be taken care of by them. It says in the letter that I should not cancel my direct debit until I've made sure that the balance has been paid.

Here is the stupid question, am I supposed to cancel the direct debit to them for the old car?

When I traded in the car before last I didn't cancel the direct debits the finance comany that time just stopped taking payments and I assumed this would have this time around as well.

I will need to phone this company tomorrow to find out if the balance has been paid and assuming that it has ask for my direct debit payment to be returned.

Are they likely to return it to me or refuse if it was meant to be me who cancelled the direct debit? If they don't return it to me I'm going to go overdrawn as I need it to pay the new cars payment later this month so it's quite urgent that I get it back.

Can anyone advise?

You should have checked the balance owing on old car, and then once happy it is settled cancel dd just in case of this happening. If they have taken a dd by mistake under the dd guarantee they have to give it back.

A dd can be cancelled by you at the bank or by the company at their end or they can expire, reactivate and change a dd on your bank account themselves.

You need to ring the bank in the morning and ask for a Dirct Debit Indemnity claim raising (this is part of the Direct Debit guarantee, every company that lets you pay by DD and every bank knows of it and adhered to it, it's the basic rules of the system) and just advise that the amount was not due if this is correct (is your new car payment going out / gone out, if so seeing two car payments should highlight the error), your bank will refund you while they then get in touch with the company to get back what they have paid to you.

I havent a clue, sorry, but as I just picked up my new car on Friday I am going to phone the dealership tomorrow.

This is something I didnt think to ask about as I just assumed the old DD would stop, now I need to make sure as I couldnt afford 2 payments!

Thanks for bringing this up

No you dont have to cancel the direct debit, if the money is not due they should not have claimed against it.
The quickest way to get the money back if it is definately an overpayment is to contact your bank and say you would like them to refund you under the direct debit indemnity scheme. They will refund you and then claim the money back from the finance company. You should be refunded by your bank within 2 days

So I should phone the finance company to check that they have been paid the balance then speak to my bank about claiming back the payment? Or should I ask the finance company to pay it back then cancel the direct debit at my bank.
New car payment doesn't go out for another week.

Go via bank for claim, they will put money back.. well.. it says 'straight away' but will depend on their workloads. In fairness your car could be in the delareships 'to do' pile and not yet looked at...

I work with Direct Debits professionally and I can reassure you that if a company makes a mistake and takes a Direct Debit they were not entitled to then they have to refund it immediately. However, if they weren't to blame (i.e. no-one told them it should stop) then although they should still refund you the money they don't have the same immediate deadline. So, you need to check the smallprint of the agreements both for the old car and the new to see who is responsible.

Ok, so I'll phone the finance company in the morning to check that the balance has been paid, which I'm sure it must have been as we've had the new car for a month now.

Then I'll speak to the bank about getting the money refunded and I'll cancel the direct debit.

thanks

We've had this happen when we traded a previous car in, they took the payment as although the balance was settled it hadn't registered on the system. They wrote o us apologising and just refunded the payment a few days later and confirmed the dd was cancelled and accout closed.

If the balance was paid off from the new loan less than 10 days before the monthly payment was due then it isn't their fault as they have to have 10 working days notice before making any change. They should still refund you but they won't be apologetic!

I phoned the finance company this morning to ask if the balance had been paid off and it had. Then I went to the bank where they refunded the money, it was back in my account by this afternoon and cancelled the direct debit.

thanks to you all for your help and advice.